Is It Better In The Office?

The Real Estate Espresso Podcast

Is It Better In The Office?

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Is It Better In The Office?

Welcome to the Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

On today’s show we’re taking a look at the benefits of working in an office environment versus working from home.

A formal office takes a long time to get there. Back in 2019, average commute times in major cities ~~has~~ 📝had reached a peak. For example, the average commute time in San Francisco was 33 minutes. During the pandemic that fell to 25 minutes. But in truth, since many ~~we’re~~ 📝were not commuting at all, commute times for those people working from home went to zero.

Now fast forward to this year and commute times are back up above 30 minutes again, ~~especially,~~ 📝essentially mirroring times from 2019, ~~depite~~ 📝despite the fact that many offices remained vacant. In fact, the downtown vacancy rate in San Francisco remains at 34.4%. So it’s still a lot of people not traveling to the office and working from home.

If the commute time is 33 minutes, there’s of course time to prepare to get out the door. There’s always variability with traffic, so if you need to be in the office for a 9 AM meeting, you probably need to leave by 8 AM in order to have time to hang your coat, get a coffee, read a couple of emails and make it to the meeting on time. In total there’s at least 90 minutes of transportation overhead associated with working in the office environment.

Now that story repeats itself across most major cities in North America. Having recently visited New York City I can tell you travel times in Manhattan to get from the downtown core to the outskirts of ~~Toronto~~ 📝the city on Friday afternoons.

When I was in the tech industry, the benefits of having teams co-located was well documented. In fact, the level of communication between team members dropped significantly when desks were more than 50 feet apart. Close working teams needed to be close together to function optimally.

~~Remember~~ 📝I remember when I was located in my office in Ottawa, Canada, and the CEO of my company was based in Sunnyvale, California. He rarely talked to me. But when I traveled to Silicon Valley, I intentionally used a spare desk outside the CEO’s office next to his secretary. During those travel periods, he would talk to me 8–10 times a day. Physical proximity makes a difference.

Being co-located in an office environment has real tangible and intangible benefits. If you’re working remotely you can’t just drop into someone and ask a quick question. You can try calling them on the phone but chances are they won’t respond. That means scheduling a meeting just to have a 5 minute conversation. There is a real loss of efficiency. It’s too easy to ignore an email, so people resort to text messaging or group chats. Those tools help. They’re not enough.

Many people who are working from home will often multitask. They might be folding laundry off camera during boring parts ~~a~~ 📝of a meeting, so the short-term benefits of working from home are clear for the individual. They don’t waste that 90 minutes a day commuting on average. That loss of time is significant, which can restore a feeling of life balance. In many cases, that commute time can be added to the workday which theoretically could make people more productive on a fixed salary.

The shortcoming is that teamwork suffers. Time is wasted by people working in isolation when in fact more efficient solutions could be found through collaboration. These are difficult to quantify. Some members of the team are reluctant to pick up the phone and call. That partly comes down to personality. For those who are highly extroverted it is not a problem. But for the thirty percent of the employee population in North America that have tendencies to be more introverted, working from home feels better. But ~~is~~ 📝it’s actually detrimental.

The amount of training ~~in~~ 📝and professional development that happens in the home environment is a fraction compared with what happens in a collaborative environment. Some companies have recognized that the office is theoretically a better environment. But then HR and the facilities department don’t actually create an optimum office environment. So those who have come in to the office three days a week are often less productive in the office than at home.

A single desk in a sea of cubicles that are not physically co-located with the rest of your specific team completely misses the point of working in the office. This has given rise to people showing up in person, maybe for a few meetings on those designated days but in most other cases not complying with the in-office mandate.

We just recently hired an employee into one of our businesses and in the past that position would have been remote, but we made the decision to build out a brand new office and give that person the option of only working in the office. That meant decorating, painting, furnishing and providing the full infrastructure for that person to feel like a valued employee.

Unless the company takes the work environment seriously, it’s going to be very hard to get the maximum out of your employees. Now I believe that the demand for office space is going to recover here. The benefits are clear if done properly. This is an opportunity for companies to redesign the office space of the post-pandemic era. That may be difficult for companies to implement this year in the middle of an economic downturn, ~~those~~ 📝but companies who embrace the best design practices for an office environment will also have the most productive employees.

As you think about that, have an awesome rest of your day. Go make some great things happen and we’ll talk to you again tomorrow.

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